Parma Community General Hospital is one of the last small hospitals in the region. And that's exactly why it is joining with UH, says Tom Zenty, chief executive of University Hospitals. He says it's a reflection of what's happening around the country.
"At the moment about half the hospitals in the United States are unaffiliated or unaligned or simply free standing," says Tom Zenty, chief executive of University Hospitals. "And the thoughts are that in the future it's going to be so difficult for free standing hospitals to continue to be successful.”
There are host of reasons smaller hospitals are struggling financially. For Parma, years of cuts in federal reimbursements along with a 2 percent reduction in Medicare funding because of sequestration led the community hospital to look for a partner, says Terrence Deis, president and chief executive of Parma Hospital.
“The truth is as we look out to the future of health care, becoming part of a large organization seemed like something we really needed to do in order to maintain a vibrant service to the community,” Deis said.
In addition, Deis said he believed UH was one of the best positioned health systems in Ohio to meet the demands of the federal Patient Protection and Affordable Care Act.
Merging with a larger health system will give Parma the ability to negotiate better pricing on supplies and back office computer systems. It will also make it easier to connect patients with specialty care at facilities like
UH's Rainbow Babies & Children's and the Seidman Cancer Center.
For consumers, the consolidation may be a mixed bag, says J.B. Silvers, who's a professor of health care finance at Case Western Reserve University.
It'll potentially increase access for people who live on the west side," said Silvers. "The counter, of course, is there is less competition."
The announcement of a merger with Parma is the second acquisition news from UH in the past 10 days. The health system is in talks to buy EMH Healthcare in Elyria. And it already partners with Southwest General Health Center in Middleburg Heights as well as St. John Medical Center in Westlake. The deals with Parma and EMH are expected to close by the end of this year.